A public spat has erupted between two of New Jersey’s most powerful Democrats over the state's most enduring hot-button issue: property taxes.
Newark Mayor Ras Baraka has used an op-ed and public statements to call for Essex County to compensate the city for hosting dozens of tax-exempt county-owned properties by offering tax credits to Newark homeowners. He argues the county’s free ride on local property taxes is unfair to Newark residents and businesses.
“The county has an opportunity to demonstrate that fairness works both ways,” Baraka wrote in the op-ed for New Jersey Globe last month. “Every municipality benefits from the services, institutions, and infrastructure located in Newark. The responsibility for supporting them should be shared accordingly, not borne disproportionately by Newark homeowners alone.”
But Essex County Executive Joseph DiVincenzo, in a public statement, has rejected that idea. He counters that Newark benefits greatly from county services already, called Baraka’s focus on the county “misguided” while chastising the mayor for raising the issue in such a public manner, and criticized Newark leaders for the city’s fiscal management practices.
“I am truly sorry if the mayor doesn’t believe Essex County does enough for the City of Newark,” DiVincenzo said in his statement. “We all feel squeezed financially and every year it gets tougher and tougher. But instead of labeling Essex County as the bad guy, you should have reached out and had a conversation with us first.”
The dispute is a renewal of a debate that has played out around New Jersey for decades. County-owned properties are exempt from local property taxes in New Jersey, placing them in the same category as state-owned properties, religious facilities and hospitals.
Cities and towns that serve as county seats are most heavily affected because they host the majority of county-owned properties. There are 55 county-owned properties in Newark, Baraka wrote in his op-ed, with a total assessed value of $717 million. If the county paid regular city taxes on those properties, according to Baraka, it would bring about $30 million to Newark each year.
Essex County is raising its tax levy this year, and according to Baraka, the average Newark homeowner will see their county taxes increase from $991 to $1,551. The total amount of taxes collected by the county from Newark taxpayers will grow by roughly $37 million, according to Baraka.
That increase has people asking questions, and Baraka said that’s what spurred him to raise the issue now.
“They want to know where it's going. People automatically assume that it's coming back to them, or that we're using it to hire more people or do stuff like that,” Baraka told Gothamist at an unrelated event. “But that $30 million is not coming to us. It's going to the county to do what they need to do with it. And so that's what made the discussion much more salient.”
DiVincenzo declined to comment beyond his statement, which was released days after Baraka’s op-ed. But in that statement he disputed the $37 million figure, saying the county levy would increase just $10 million.
DiVincenzo claimed Newark instead collected $30 million more than necessary from residents in county taxes — then held on to that money for municipal purposes until it could secure a state loan to cover the spending. Susan Garofolo, a Newark spokesperson, confirmed that Newark received a $30 million loan from the state last year but repaid it after selling bond anticipation notes.
"This shell game only hurts Newark taxpayers," DiVincenzo wrote.
Baraka was re-elected this year to a fourth term as mayor of Newark, which is New Jersey’s most populous city and the county seat of Essex County. He’s coming off a campaign for governor in which he finished as the leading progressive candidate, but fell short in the primary to the more moderate Gov. Mikie Sherrill.
DiVincenzo – widely known as “Joe D” – has served as Essex County executive since 2003 and is effectively the boss of the county’s Democratic machine. That makes him one of New Jersey’s most influential political powerbrokers. He’s up for re-election again this fall, though he faces only token opposition from Republicans and political analysts expect his victory is all but certain.
The two do not always align politically. DiVincenzo typically takes more moderate positions; he endorsed Baraka’s opponent when the mayor was first elected in 2014, and he endorsed Sherrill over Baraka in last fall’s gubernatorial race. But the two have frequently worked together on initiatives around Newark, most notably the effort to replace every toxic lead service line in the city.
DiVincenzo was clear in his statement that he disagrees with Baraka’s tax credit pitch, so it's unclear if anything will come of the idea. Any statewide changes to the financial relationship between counties and county seats would have to come from the state Legislature.
“ Obviously, I don't think they're going to do anything tomorrow,” Baraka said of the legislature. “But we're going to present legislation to try to address this issue, to lift it up and have more discussion about it statewide.”
But making a case in Trenton will likely mean Baraka asking for help from Essex County’s delegation — and that delegation owes a lot to DiVincenzo.
“Essex County legislators, in particular, do not want to be in the middle of this. If they could help broker a solution, that would be wonderful, but they don't want to be in the middle of a game of chess between the mayor and the county executive,” said Micah Rasmussen, the director of the Rebovich Institute for New Jersey Politics at Rider University.
“Anybody in Essex County is going to want to defer to the two lions sitting down with each other, hammering it out between them, figuring it out,” Rasmussen added. “Nobody wants to be in the middle of that.”
Baraka said he did not speak to DiVincenzo before publishing his op-ed last month, and as of Thursday, the two still haven't spoken directly about the issue.
“ I'm sorry he took it personally. It wasn't about him. This stuff predates him. It'll be here after us,” Baraka said. “ When he cools off, we can go have a tequila and talk about it in depth. But the reality is the problem exists, right? And we have to handle it.”
